Silverjet... another one bites the dust

[Chris Tully]

It is not a sustainable business.

Even with today’s large amount of business and corporate travel it is rare to see sales of full-priced business class fares.

A significant amount of traffic in these cabins travel on redemption (points).

[Will T]

I agree with Chris. The market for stand-alone differentiated, low cost, all premium long-haul travel is limited (imho), and airlines trading away network features and feed for price are unlikely to get anything like the corporate yield or revenue quality that the big network carriers can (and do) get.

A lot of these 'product-specialist/low fare' trans-Atlantic carriers targeted the SME market ('the independent business traveller') - as indeed Virgin Blue have been of late - but little is known about this segment, and I'm not so sure that they're always a better customer than the typical full service leisure traveller. They're price-sensitive, and seem to expect all the accoutrements of premium cabins, without paying for them. Oasis targeted a similar segment, and was also unsuccessful. Obviously the fuel price has compounded the woes of any airline yet to reach 'critical mass', too.

As I see it, the scope for long-haul, dedicated premium services is - under the present circumstances - confined to selected spokes of existing full service networks, having the required yield and margin quality (eg. Privatair in Europe, SQ all-business to New York, a potential QF SYD/LON vv. non-stop, etc). Time will tell!

[D Chan]

Originally Posted by Will Tidmarsh

(eg. Privatair in Europe, SQ all-business to New York, a potential QF SYD/LON vv. non-stop, etc). Time will tell!

Time will certainly tell but I think Privatair has a good chance to survive. They operate for other airlines and so they will still have pax from the respective airline's networks.

Regarding SQ. I wonder if they are able to generate much highly time-sensitive cargo revenue from their all business class service. I would think with less pax on the main deck (albeit heavier seats) might mean some of the weight reduction which could go to carraige of freight on the holds.

About Silverjet, I was just reading Airline Business or perhaps it was Flight International, that an arab investor in Dubai was willing to chip into Silverjet so that it could expand to other markets etc. obviously this hasn't happened. Maybe the investor pulled out of the deal :P